Australian pharma lobbies on PBS prices

Pharmaceutical companies are lobbying the Australian government to lift Pharmaceutical Benefits Scheme ceiling prices of drugs to allow inclusion of those considered too expensive, according to the industry body Medicines Australia.

The proposal from Medicines Australia states that this will save the government A$2.0 billion ($1.52 billion) by 2012, a claim which is disputed by the Department of Health, which has calculated that just one class of ulcer drugs would have increased the cost to the PBS around A$6.9 billion between 1992-93 and 2004-05.

The government is seeking to cut drug prices and thus the A$6.0 billion annual cost of the PBS, and to increase the share of generic medicines prior to the expiry of patents on a number of high cost drugs over the next few years, allowing copycat versions to enter the market. The federal government pays the same for medicines with the like health outcome, patented or generic, so there is little incentive for new copycats to compete on price, which means the country will not make large savings unless it changes the method of payment for PBS drugs. One option would force generic manufacturers to compete on a supply cost basis.